恒生电子(600570):业绩低于预期 中期维度需求确定性仍强

Hang Seng Electronics (600570): Performance falls short of expectations, medium-term demand certainty is still strong

廣發證券 ·  Jan 30

Core views:

The company's performance in 2023 fell short of expectations, mainly due to delays in closing the fourth quarter. On January 28, 2024, the company issued an announcement. According to preliminary estimates by the company's finance department, in 2023, it is expected to achieve revenue of about 7.292 billion yuan, yoy +12.14%; net profit due to mother is estimated to be 1,345 billion yuan, yoy +23.27%; and it is expected to deduct non-net profit of 1,378 billion yuan, yoy +20.38%. The revenue growth rate was lower than the operating plan made in the 2022 annual report (+18% revenue for 23 years), and it was also lower than our performance forecast. The main reasons for the changes in the company's analysis performance are: (1) Revenue: Financial institutions' IT budget execution rate declined in the second half of the year, project management became more strict, and customer procurement ideals, procurement decision-making processes, and acceptance processes were lengthened, which had a certain impact on the company's revenue growth in the fourth quarter compared to previous years. (2) Return to home and deduction: Continued growth is mainly due to the company's increased investment in core components and strategic projects, and at the same time implementing more detailed management of costs and expenses, making the revenue growth rate higher than the growth rate of costs and expenses.

Pay attention to poor market expectations for securities asset management IT. Affected by incidents such as financial institutions' fee cuts, the market is concerned about financial institutions' subsequent IT investment. However, we believe that (1) based on the objective conditions of the industry and the upgrade cycle, downstream demand still has an opportunity to show countercyclical properties. (2) Judging from the downstream expenditure structure and investment order rules, including the requirements of Xinchuang, the application software business system should be well guaranteed. (3) There is a great possibility of pattern change. As a result, many areas of poor market expectations are creating more investment space.

Profit forecasting and investment advice. Taking into account the decline in IT budget execution rate for downstream customers and lowering profit forecasts, the company is expected to achieve net profit of 13.45/14.06/16.71 billion yuan in 23-25 years. The company's leading IT position in the capital market remains stable, giving the company 40 times PE in 2024, with a reasonable value of 29.61 yuan/share; however, considering the slowdown in growth, it was downgraded to an “increase in holdings” rating.

Risk warning. The release of downstream customer demand fell short of expectations; the promotion of the company's new products fell short of expectations; and the progress of financial credit innovation fell short of expectations.

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